[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 488: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead[phpBB Debug] PHP Warning: in file [ROOT]/includes/functions.php on line 4762: Cannot modify header information - headers already sent by (output started at [ROOT]/includes/functions.php:3897)[phpBB Debug] PHP Warning: in file [ROOT]/includes/functions.php on line 4764: Cannot modify header information - headers already sent by (output started at [ROOT]/includes/functions.php:3897)[phpBB Debug] PHP Warning: in file [ROOT]/includes/functions.php on line 4765: Cannot modify header information - headers already sent by (output started at [ROOT]/includes/functions.php:3897)[phpBB Debug] PHP Warning: in file [ROOT]/includes/functions.php on line 4766: Cannot modify header information - headers already sent by (output started at [ROOT]/includes/functions.php:3897)Seattle Bubble Forum Archive • View topic - rent vs buy: a different comparison

I agree with sniglet that mortgate interest rates should fall quite a bit. Banks are getting loads of taxpayer money at super low rates (close to zero). But they're afraid to lend out for mortgages, because house prices are falling. What few loans they do at 5% today, they make a big profit (if the borrower doesn't default); however, they need all that profit to survive. What will happen when house prices fall a lot further? Lending becomes less of a risk then, and so competition lower rates. This will put upward pressure on house prices, but the tail doesn't wag the dog--prices must fall before equilibrium is reached.

I have a friend in BHAM who is always trying to get me to move up there. So...I look at home prices...they are still way overpriced. Pay no attention to the "asking prices" on Craigslist WRT what rents really are...Rents are negotiable also and many people have pie in the sky asking prices and the homes will sit indefinitely.

People are also desperate for roommates up there so take the "doubling" up thing with a grain of salt. My friend knows PLENTY of people that would love to rent a room from me and keeps reiterating the fact. Thing is....I don't have any reason to live in BHAM. BTW...my friend isn't the one looking to rent rooms out. He just knows many that are, and those people would rather do it by word of mouth before they throw their offer out to the world on CL.

Jon, every way you twist actual numbers, they suggest you are wrong. Demand is simply lower than you believe, and as speculators leave the market, it drops further. Regarding supply, builders are cutting back today because they overbuilt. We probably won't have supply constraints for a decade.

Jon quote: "Only if we go back to 1800s-style of many people sleeping in the same bed."

Anecdotal evidence that there is tons of housing available for a growing population:

1) A friend of mine who is director of a research program at the Jet Propulsion Labs is one of 5 brothers raised in a house with one bathroom. He is the oldest and went away to college in 1977 and the family did not consider themselves poor or deprived.

2) I did the house-mate thing for 5 years in a house with 1 bathroom and 3 independent professional people living in it while I was working in high-tech from 1989 to 1994 and didn't consider myself put out. We could have each afforded a 1,600 sq foot house, but were very comfortable where we were, and enjoying the extra disposable income we each had. The roommates changed over a bit during the 5 years.

3) My husband and I both work in high-tech and we rented the exact same 2br 1ba apartment from 1995 to 2005 just because it was easy and cheap and left us tons of time to kayak rivers and climb mountains. We did not feel deprived.

4) I am amazed at how many SFD have a full unit downstairs complete with 2nd kitchen. But so many of the recently build huge 2,500 sq ft homes could easily be converted to that model.

5) One person can comfortably live in about 800 sq ft with no walk-in closet, as evidenced by the smaller size condo sales. A couple can live luxuriously (depending on your definition of luxury, and I'm using my own) in 1,100 sq ft as evidenced by my own experiences.

There is tons of excess sq ft of housing that can absorb huge population growth very comfortably. Again, I use my own definition of comfort, but right now my spouse and I are much more comfortable in our 1br 1ba than anyone with an under-water mortgage no matter how many br and ba they have.

I wonder what the avg amount of sq ft per person was in the 1800s and how many decades of population growth it would take for us to get to those levels?

An wall mounted LCD TV has a much smaller footprint than an old console CRT TV. And that helps make room for the XBox and/or Wii and a place to put all the games and controllers. And even if you don't have a desktop computer anymore, you still have a printer. While something like a Kindle might someday take the place of a bookcase sometimes, I don't think they will be affecting real estate prices until quite a long time from now (long after improvements in laptops push them out of the marketplace in any case).

When large families lived in the same house, they could all get together in the same room and watch network tv shows because there wasn't that much to choose from and nothing else to watch. That won't ever happen again. Ever try to read a book in the same room as a kid talking to his friends while playing on XBox?

Conversely, the push towards telecommuting means people want a room they can dedicate to their work. Perhaps with the husband and wife in separate offices. People were rushing to buy McMansions with near-zero lot lines because that suits their lifestyle. Having unemployment go from 5% to 10% for a couple of years while inventories are drawn down is not going to change that.

In any case, save up all your ideas for saving space for when the inevitable population pressure catches up with current housing. It will be very difficult to build a house when inflation drives up mortgage rates, so we will have to make do with little more than the current housing stock that we have now for quite a few years to come, until rents rise enough to fully pay for new construction, which as people have noted will be 2x-3x current rates.

There are in the US. Probably more, by now. Some cities deal with vacancies by bulldozing houses, because it's easier than finding someone to buy it. 3 million people per year will require at least a decade to eat up that volume.

Locally, there's a huge glut of condos, townhomes, and new-construction SFH in the greater Seattle area. We're grossly overbuilt. Only now are housing prices starting to reflect that.

"The share of empty homes that are for sale rose to 2.9 percent, the most in data that goes back to 1956"

"The vacancy rate was 3.5 percent in urban areas and 2.6 percent in suburbs, the report said."

It won't take long for even 1% growth per year to wipe that out. Great Britain just recently started monetizing their debt, and the Fed will consider that in their meeting next week. If so, that will create jobs here that will attract immigration from countries where they can't do such blatent monetization because it would be a more immediate disaster.

As you point out, some of the vacant houses are in locations of such little value that they are demolished. The movement from rural to urban areas passed the 50% mark, but is still continuing, leaving shacks like the ones you see sometimes on http://www.lovelylisting.com/. The US population is also migrating west, leaving large urban areas in the Northeast and Midwest such as Detroit as ghost cities. The driver's license for Feb is out, and it shows that while people didn't move in to Washington as much as before, there were leaving at an even lower rate, so the net gain is still almost the same.